A Study On The Corporate Governance Structure Of Chinese Public Universities

The core issue of modern university system is the university governance structure. The reform and improvement of Chinese University governance structure is the key factor to the structure of modern university system with Chinese characteristics. The Chinese university system now is in a critical period of change, and the country’s public universities are making attempts in order to improve the governance structure of the university. But from the academic point of view, how to improve university governance structure is still lacking of theoretical basis with convincingness.Since China opened its door in1978, the construction of university governance structure has been attached great importance, which is firstly promulgated in2010in the "National medium and long-term Education Reform and Development Plan (2010-2020)". In this research, we consider the establishment of effective ownership as the basis of the university cooperate governance structure, and the structure is made up by external governance structure and internal governance structure. The internal governance structure is combined by power allocation system, operating mechanism and some other components, which forms an independent, responsible, coordinate and balanced system.In the traditional theory of corporate governance, the corporate governance structure mainly includes shareholders, trustees and supervisors boards. As to the nonprofit organization, its governance structure consists of members assembly, board of directors, board of supervisors and the management, and the members assembly becomes the highest organ of the cooperation power. Because the nonprofit organization has no shareholders, its directors board plays important role in the nonprofit governance. As a special nonprofit organization, the university draws up management experience from corporate governance and nonprofit organizations, but university governance also has its own uniqueness. The realization of the core functions of the university, which are research, teaching and social services, lies on the university autonomy and academic freedom.Many countries and regions recognize public colleges and universities as legal person of public law. Legal person is an organic body, which should have a complete organizational structure and system so as to ensure implementation of the whole system. Since the1978reform, it has been carried out a series of reform around the "Institutes of Higher Learning" and "implementation of the legal status of the University" in the field of higher education. After obtaining legal status, Chinese university presidents became legal representative. But the university’s governance structure almost has no other any substantive changes without this. First, the corporate governance structure establishes on the premise that ownership structure is clear. The state is the virtual owner of the university which is in the absence of the actual owner of the property. Though public universities each have actually occupy and use the part of the state educational assets, no university has the power to make decisions independently, nor has the right to dispose of residual claims and assets. That is to say universities do not have complete and independent legal property rights. We should learn from the western that through the trust, as the owner of the assets on behalf of the Government of the University of the university’s land, buildings and capital entrusted to manage public universities, the University enjoys the trust as the trustee of the trust property. And during the self-management, the government has no power to intervene. Second, as a body corporate personality, the decision-making power should not be entirely focused on one person, and thus the establishment of the legal authority to determine the legal representative is much more critical. According to the "Higher Education Act", the party committee bearers the highest decision making body of the character. But in reality, the party committee, the principal and the academic committee are part of the transaction to varying degrees, but none has the ultimate decision-making authority.In1995, the Chinese education institutions gained legal status according to the "Education Law". After that, the role of university organization has undergone great changes. The relationship between the universities and the government shifted from the purely administrative affiliation to separate business corporation and government body relationship. The organizer and the management are the two main bodies which are close to the university. The relationship between the organizer and the corporation should be trust-fiduciary relationship and the relationship between the corporation and the university president should be trust-agent relation. Because of the absence of legal authority, the trust-agent relationship in Chinese public universities is incomplete. The government is not only the organizer of the university, but also the management of the university. As higher education resources and national educational rights are controlled by the government, the universities have no independent rights during the business running.A large university is bound to be bureaucratic in nature. Under the planned economy, universities are part of the entire country hierarchical structure. And as a part of the superior administrative department of affiliated institutions, universities have no right of the self-management. The administrative system of the university is bureaucratic just like the government and the president stands at the top of the power structure. He is entitled to appoint other administrative personnel, and effective command of the entire administrative system running. Party committees within the university governance structure plays a role in the highest decision-making body, the decision making process to follow democratic centralism. As the head of the university, the president has the power to make final decision in the administrative decision-making process, but the political party leader, thought leadership and organizational leadership can constrain the president’s decision-making freedom. University is a typical stakeholder organization. The governance authority has the final right of scrutiny, but by the various committees should be composed of teachers in the academic decision to move, demonstration and other sectors to play a greater role. From a considerable extent, control authorities have the right to be finalized and symbolic form.Although a considerable part of the Chinese public university has gradually established a board of directors system, the board is primarily a funding mechanism exists. The director is just an honor seat to reward large investment which does not have decision-making power to vote. It is a key difference compared with the western universities. During the operation of the university, incentive and restraint mechanisms should primarily be a legal authority on university president’s incentives and constraints. But in reality, despite the post of Principal contains a number of incentives and constraints, due to the lack of legal authority, the principal does not exist so that it is difficult to establish a truly effective incentive and restraint mechanisms. Under the "Education Law" and "Regulations on Open Government Information," the universities have also developed their own information disclosure implementing regulations.